indigenous and colonolial origins of comparative eco devlt- bayly

8/22/2019 Indigenous and Colonolial Origins of Comparative Eco Devlt- Bayly

1/37

Policy ReseaRch WoRking PaPeR 4474

Indigenous and Colonial Origins oComparative Economic Development:

The Case o Colonial India and Arica

C. A. Bayly

The World BankDevelopment Research GroupPoverty Team

January 2008

WPS4474


2/37

Produced by the Research Support Team

Abstract

The Policy Research Working Paper Series disseminates the fndings o work in progress to encourage the exchange o ideas about development

issues. An objective o the series is to get the fndings out quickly, even i the presentations are less than ully polished. The papers carry the

names o the authors and should be cited accordingly. The fndings, interpretations, and conclusions expressed in this paper are entirely those

o the authors. They do not necessarily represent the views o the International Bank or Reconstruction and Development/World Bank and

its afliated organizations, or those o the Executive Directors o the World Bank or the governments they represent.

PolicyReseaRch WoRking PaPeR4474

This paper concerns the institutional origins o economicdevelopment, emphasizing the cases o nineteenth-century India and Arica. Colonial institutionsthe

law, western style property rights, newspapers andstatistical analysisplayed an important part in theemergence o Indian public and commercial lie in thenineteenth and twentieth centuries. These institutionsexisted in the context o a state that was extractive andyet dependent on indigenous cooperation in manyareas, especially in the case o the business class. In suchconditions, Indian elites were critical in creating inormalsystems o peer-group education, enhancing aspiration

This papera product o the Poverty Team, Development Research Groupis part o a larger eort in the departmentto investigate the role o history in development processes. Policy Research Working Papers are also posted on the Web athttp://econ.worldbank.org. The author may be contacted at [email protected].

through the use o historicist and religious themes andin creating a benign sociology o India as a preludeto development. Indigenous ideologies and practices

were as signifcant in this slow enhancement o Indiancapabilities as transplanted colonial ones. Contemporarydevelopment specialists would do well to consider themerits o indigenous orms o association and publicdebate, religious movements and entrepreneurial classes.Over much o Asia and Arica, the most successulenhancement o peoples capabilities has come throughthe action o hybrid institutions o this type.


3/37

Indigenous and Colonial Origins of Comparative Economic

Development: The Case of Colonial India and Africa

C. A. Bayly

Vere Harmsworth Professor ofHistoryUniversity of Cambridge

1

1 Financial support from the WDR 2006/SIDA fund is gratefully acknowledged. The opinions expressed in

this paper are solely the view of the author and should not be attributed to the World Bank, its executive

directors and member countries, or any affiliated organization.

I am very grateful to Vijayendra Rao and Michael Woolcock of the World Banks Development Research

Group for the consistent interest they have shown in the development of this paper and for the many

important suggestions for improvement that they have made. Other members of the Group contributed

helpful comments at a seminar held at the Bank in 2006. I would also like to acknowledge the help of

Simon Szreter and Ruth Watson of Cambridge University for their comments from the perspective of a

European economic historian and an African historian respectively. Research for this paper was partlycarried out while I held the Chair of the South in the Kluge Center, Library of Congress, Washington DC

on 2006. I warmly thank the Center and its staff for their help during my time there.


4/37

Recently, the debate about comparative economic development has broadened out to take

account of work in other major human sciences, particularly anthropology, sociology,

philosophy and history. Development specialists have become increasingly aware of the

need to understand the history and ideologies of the societies within which they work in

order to encourage better reactions to their programs. In the first place, the engagement

between development economists and anthropologists under the broad aegis of the World

Bank and other international institutions has brought about significant widening of the

range of the debate. Valuable case studies have resulted from the elaboration of Amartya

Sens notion of human capacities and capabilities in contemporary development (Sen,

1997). Such studies stress the importance of discussion, consensus, aspiration and peer

educators (e.g. Rao and Walton, 2004). One purpose of this paper is to begin to give thiswork a deeper historical context. The new approach that engages with the moral and

intellectual as well as the purely economic origins of development seems most

appropriate even for a colonial situation such as nineteenth-century India, which provides

much of the material here. Capacities and capabilities often develop only in the very long

term, and they can do so even in most unpropitious circumstances.

Secondly, recent discussions of the conditions for equitable economic

development have benefited from the work of economic historians, authorities such as

Douglas North (North, 1990), Stanley Engerman, Kenneth Sokoloff (Engerman and

Sokoloff , 2000) and others. One recent and highly influential achievement has been the

scholarship of Daron Acemoglu, Simon Johnson and James Robinson (hereafter AJR),

especially their article on The colonial origins of comparative economic development

(Acemoglu et al., 2001a). This work has found an influential place in the World

Development Report 2006(World Bank, 2006). AJR argue that there is a strong positive

correlation between disease regimes, successful European settlement, the generation of

good institutions (accessible law, secure and general property rights, deliberative

bodies, etc.) and contemporary wealth. They do this with sophisticated econometric

models. In particular, they use settler mortality in the long term as an exogenous control

on their data. But they also test for other variables such as the form of different national

2


5/37

colonial projects and the role of religion in economic aspiration as suggested by the

theses of Max Weber. In a complementary article, Reversal of fortune (AJR, 2001b),

they nuance this approach, arguing less from an ecological perspective than from a

demographic one. The areas that were richest circa 1500 (e.g., the Mughal Empire, China,

the Aztec Empire) attracted extractive styles of European colonialism and semi-

colonialism and have consequently become relatively poor over the last half millennium.

Those relatively under-populated and impoverished territories in 1500 (e.g., Australia,

New Zealand, the areas which became the USA or Argentina) required a much greater

input of European capital and labor, and thereby developed good institutions. Even

where colonial metropoles attempted to control and exploit such new Europes, the sheer

dynamism of the settler societies burst through these colonial bonds, creating more

equitable institutions.

For social historians this work represents a revelation and a challenge. It is a

revelation because it represents a way of rigorously testing the very broad claims made

for and against the developmental effects of empire and colonialism in contemporary

historiography and public polemic. I refer here to a spectrum of writers from Emmanuel

Wallerstein, Andre Gunder Frank and William Easterly to Bill Warren and Niall

Ferguson. But AJR also offer a challenge to the sort of bottom-up, archive-based,

contextualized, regional and local investigations that are the staples of most historians.

This is because the nature and genesis of good institutions is inferred from a wide range

of secondary literature and statistical correlations, rather than being tested against

contemporary evidence, as social historians tend to do. Broadly, too, AJRs major articles

might seem to privilege good institutions of a Northwestern European variety and this

runs counter to the cultural relativism which influences most historians of the extra-

European world today. While AJR attribute the reversal of fortune of other societies to

the form of European colonialism rather than to intrinsic civilizational inadequacy, the

invocation of good, colonial institutions has an uncomfortable feel about it for some. It

might seem to revive the language of nineteenth-century classical political economy

pervading the work of writers such as John Stuart Mill and John Elliot Cairnes. It could

be taken to imply that development agencies must find ways of implanting these

3


6/37

institutions in societies that the Victorians would have considered backward, but are said

now to have suffered a reversal of fortune. This is not AJRs intention, but the problem

of language points up the need to examine the issue of indigenous and hybrid capabilities

in the history of development, which is the theme of the present article.

Much of the weight of AJRs analysis falls on the Americas and Australasia, as

far as the benign aspect of colonial institutions is concerned, and on Sub-Saharan Africa

in respect of their extractive and parasitical dimension. Yet at least 80 percent of the

global population has always lived in societies stretched across Asia and North Africa

where European settlers were unable to exterminate the indigenous population or seize

resources as in Australasia or America, because these societies had already developed

sophisticated states and economies. What was the role of these non-European state forms

and economic institutions in comparative economic development? In the middle of AJRs

spectrum that runs from rich societies with good institutions to poor societies with bad

institutions, there lies a large group of heterogeneous examples. These range from Japan

and wealthy Chinese coastal societies, where Europeans neither settled nor even

established long-lived extractive colonial institutions, to poor parts of the Ottoman

Empire or north Africa which failed to benefit from global economic expansion in the

early modern period, but were only colonized towards 1900.

Again, even within what became extractive imperial dependencies and poor

postcolonial states, there have been huge variations between different regions. Dutch

ruled Java may have suffered agricultural involution, but the Chinese port cities from

Penang and Singapore to the Sulu Sea registered rapid economic growth in the nineteenth

century. Likewise, the Punjab and the princely state of Mysore in the British Indian

Empire were much richer than the province of Bihar. Many of these cases may well be

amenable to AJRs style of analysis, but only if indigenous capabilities as well as

colonial institutions are taken into account. Finally, it is important to examine historical

processes as well as outcomes. Historians and development specialists need to understand

the actual mechanisms by which apparently benign European institutions were

4


7/37

transformed and appropriated- or, for that matter rejected- by people of non-European

societies in the light of their own persisting social organization and aspirations.

The broad picture

Taken as a whole the meta-narrative of AJRs work remains the rise of the West,

particularly the North European and North American West. Initially, then, it may help to

pose a broad revision, though not rejection, of this meta-narrative. The position adopted

by this paper is as follows. While it is difficult to diminish the critical importance of the

rise of the West as some historians have done recently, this needs to be put into the

context of dynamic changes in other world societies, which continued even during the

nineteenth- century age of imperialism. These indigenous, hybrid or heterogeneousinstitutions have played a major part in the relative success of economic development for

the bulk of humanity in the middle of the AJR spectrum.

First, archaic and early modern globalization from c. 1400-1800 AD saw

interconnected ideological, social and economic development in all major world

societies (Bayly, 2004). This produced new state forms, new systems of knowledge and

the acceleration of what Jan de Vries calls industrious revolutions in many parts of the

globe, not just in Europe (de Vries, 1994). Industrious revolutions preceded and did not

necessarily lead seamlessly to industrial ones. They were revolutions of imagination,

taste and consumption that led to the re-organization of family labor and demand to

accommodate new desires for consumption. One local example of such growth was the

status-driven demand for fine samurai swords and daggers that gave rise to a flourishing

metallurgical industry in Tokugawa Japan (1600-1850). This expertise in metal, which

greatly predated European industrialization, played a part in Japans later industrial

development. Before 1800, a sense of nationality had also emerged in several parts of the

world and not only in Western Europe. Japan, northern Vietnam and some Indian regions

are cases in point. This both proceeded from and in turn facilitated the integration of

regional markets. Factors such as these have all influenced the historical conditions for

modern development, though in different ways and at different periods. World-level

5


8/37

development has always been multi-centered and interactive even at the high point of

western colonialism. The period of Euro-American dominance has been, in historical

terms, relatively short.

Secondly, parts of North Western Europe did, however, gain a great comparative

advantage from at least the beginning of the eighteenth century, and in some fields rather

later (Pomeranz, 2000). This advantage arose from high productivity and high yields per

acre in agriculture; innovation in large-scale amphibious warfare in and outside European

waters and the control structures that arose around them; a vigorous culture of sociability

and criticism in the public sphere that tended to refine the activities of the state and

corporate mercantile bodies. Industrialization was not generally critical until c.1820, after

Europes comparative advantage was well established. But it did reinforce that advantage.

Thirdly, these comparative advantages were not evanescent, but neither were they

permanent. Before the end of the nineteenth century, non-European peoples had begun to

appropriate and adapt European methods and institutions to their own forms of sociality

in order to improve their quality of life and challenge the extractive colonial state. This

indigenous development was materially enhanced by the need for European and colonial

states to off lay legal, economic, military, educational and, eventually, political authority

to indigenes in order to economize on manpower, blood and treasure.

So the debate about the role of institutions in the modern development might

consequently benefit from a historical investigation of how, when and why indigenous

people appropriated, adapted, absorbed and often totally reconstituted European-style

institutions in the light of their own mental and material capacities. This article, therefore,

posits a hypothesis of the hybrid, even heterogeneous origins of comparative economic

development, as opposed to their colonial origins. The paper goes on to consider the

case of India and then Africa in the nineteenth century in some detail. It seeks to specify

the nature of the institutions that seem to have contributed to relatively successful and

equitable economic development.

6


9/37

Building social capabilities: the origins of aspiration in India

Despite the Bhartiya Janata Party, the former right wing governments, recent electoral

propaganda about India shining and comparisons with China, Indias GDP remains

modest, about the same level as Russias and considerably less than Chinas (though the

latter is probably overestimated). Yet Indias growth rate has speeded up dramaticallyover the last few decades. Some now argue that Indias knowledge economy, and

remarkably robust democratic institutions, will give it greater flexibility than China in thelonger run."

The core of the paper argues that some of the socio-economic capacities of Indias people

that help to explain the present cautious optimism were in the process of development

during the mid-nineteenth century. This was a period when, in the terms used by AJR,

British India remained an extractive state, while at the same time some of the benign

institutions of settler colonialism to which they point were appropriated and deployed in

processes of improvement by indigenous commercial and intellectual elites. These elites

melded western education and legal techniques with Indian patterns of behavior and

thought which can be traced back to the political and economic forms of the late-Mughal

Indian and Indian Ocean world.

On the face of it, nineteenth-century India, and particularly Bengal, which

provides much of the information for this argument, represents a case of deep economic

dependency. The early nineteenth century saw a deindustrialization of the artisan cultures

of the major centers. The mid- and second half of the century witnessed continuous and

lethal famines occurring throughout the country along with waves of agrarian unrest,

even if railways and the steamship brought about some economic growth in the port cities

and their hinterland (Kumar (ed.), 1980; Hall-Mathews, 2005). The economic nationalist

Dadabhai Naorojis workPoverty and Un-British Rule in India (Naoroji, 1903) mounted

a systematic indictment of government over-taxation and economic and social neglect.

Yet material in Naorojis works and speeches also demonstrate the emergence of new

capabilities in Indian society. These included the sustaining of vigorous and outward

looking entrepreneurship, a remarkable flowering of Indian associations, the development

of a vigorous free press, even within the constraints of colonial censorship and the

beginnings of attempts to enhance the capabilities, in Amartya Sens formulation, of the

peasantry, urban working classes and women.

7


10/37

The colonial state, labor and elites

For social historians it is important to understand the moral, mental and associational

culture of elites in the roots of Indias nineteenth century improvement, or development

as it would now be termed. But it is first necessary briefly to discuss three contexts for

the argument. First, what was the nature of the nineteenth-century, extractive state in

India? How far were there any truly colonial origins of Indian development even in this

case? There is a vast literature on the topic, but economic historians have done little more

than fight for a century or more over what numbers to affix to the basic conditions

outlined by Dadabhai Naoroji. The British rulers did develop India, but only to a limited

extent, and largely in their own interests. India was broadly spared from internecinewarfare that plagued contemporary China and Africa and was unified by British fiscal

and administrative measure (Goswami, 2004). Markets were integrated by the railway,

telegraph and steamship, widening merchant horizons. Legal provisions gave stability to

upper landed and commercial elites. On the other hand, the revenue take from an

unprotected peasantry was higher than it had been under indigenous post-Mughal

regimes. Much of Indias surplus was drained off to Britain in railway interest, civil

servants salaries, etc. The colonial rulers wasted money on expensive frontier wars.

Indian artisan industry was decimated by imported manufactured goods and Indias

nascent modern industry received little serious tariff protection in the era of free trade.

Indian leaders, therefore rapidly adopted Friedrich Listss model of a national political

economy.

This is well known. More interesting is the debate about the impact of the colonial

state on ideology and class formation. The colonial state was indeed extractive, but it was

not hegemonic (Guha, 1997) in that it did not wholly dominate the mentalities and

ideologies even of Indias elite. Neither, however, was it dominant across the whole of

Indian society. The state was very weak at its fringes and widely reliant on Indian agency

everywhere. It was often split into competing agencies. This had two consequences. First,

it left great room for maneuver to Indian corporate bodies, kin groups of landlords, self-

8


11/37

styled caste associations and other status groups that had emerged during an earlier period

of post-Mughal de-centralization. The picture in India during the transition to colonialism

is in some degree similar to that outlined by Greif (Greif 2006, p. 383) for the European

later Middle Ages. This certainly helped Indians to build capacity. The colonial state was

forced by its relative weakness to introduce limited public education, especially higher

education. It conceded a limited degree of local self-government to Indians by stages in a

move that distantly mirrored the contemporary creation of a democratic franchise in

Britain.

On the other hand, the hypothesis in Greif that a relatively weak state was one

condition that allowed the development of the modern economy from its medieval

antecedents cannot be too widely applied. Vigorous state action by the Meiji government

against elites and even heavy regressive taxation of Japans peasantry allowed the state to

build up a development fund for investment on infrastructure and new industries (Jansen

(ed) 1989; Jansen, 2000). This option was not available to the contemporary Qing

Government in China or the British Indian government. The latter, paradoxically in view

of its extractive status, appears to have been a poor government in a poor society,

progressively less willing to encroach on the funds and authority of powerful rural elites.

A second framing issue concerns labor supply during the beginnings of modern

economic development. Equity and the building of human capacity may, in fact, stand in

opposition to the need for modernizing economies to find a cheap and easily controlled

labor supplies. Japanese family structures and pressure on the peasantry drove workers

into the factories of the Meiji period, just as the decline of artisan textile production had

driven British workers into machine-industry one hundred years before. Contemporary

China and India also both seem to have flourished economically, while the conditions of

life for some sections of the peasantry have deteriorated. Riots and opposition to state

expropriation in China has been matched recently by mass suicide among farmers in

India. In the nineteenth century, the colonial state in India ensured as far as possible the

existence of a quiescent peasant economy to fulfill its revenue needs, while at the same

time creating an enclaved labor force in areas such as Chhota Nagpur, Assam and the

9


12/37

Bombay Konkan to serve special interests such as the tea estates and early factories. The

hierarchical and segmented nature of Indian society may, paradoxically, have aided the

creation of a labor force and this limited colonial-era industrialization (Chandavarkar,

1994). In these cases, the effort to industrialize and raise the living standards of the elite

tended to militate against equity in the distribution of income and other social goods.

Only ameliorative action by the state and altruistic capacity building among the poor by

elite action could alleviate these conditions.

This comparison becomes sharper if one considers the African case, where labor

was historically freer. African historians have argued that the exit option of African

farmers (Hyden, 1980), their ability to migrate to areas where their labor could find better

rewards, was largely determined by the extreme physical conditions in which many of

them worked. The state was once again weak or non-existent and it is argued that many

African societies remained relatively un-stratified by comparison with those of Europe

and Asia. The broad disadvantage for Africas historical development appears to be that

the emerging state and later agrarian and urban industry has found it difficult to secure a

reliable tied labor force. Equity and economic development have often, therefore, stood in

contradiction to each other and here the state must intervene as an equalizing and

protective force in a manner that it rarely did during the colonial period.

Much of the remainder of the paper concerns capacity building among the

nineteenth- century elites of colonial India. This is partly because the historical data are

much fuller for educated professional and commercial people than for the poor. But a

more important reason is that elites have always been critical to development and the

creation of new capabilities, though this fact has sometimes been lost sight of with the

recent emphasis on the subaltern, the disempowered under-classes. The capacity of

indigenous elites to adapt to new forms of the state, master new forms of literacy and

communication and pass on these skills to the wider population was critical both in

raising income levels in the long-term and in expanding health and education. Nineteenth

century Indian elites provide a case in point. It may well be that at times, and especially

during the early nineteenth-century, the consolidation of the new Indian elite actually

10


13/37

encompassed the collapse of earlier systems of social provision, as it did in

industrializing Europe. My concern here, however, is with the medium and long-term

building of capacity and the role of specifically Indian endowments in this process.

However inequitable Indias growth may have been over the last two hundred years, it

would have been even more so without their capabilities.

Sustaining entrepreneurship

The pre-existence and survival of an indigenous commercial class even during the period

of Euro-American imperialism was one of the conditions discussed by the modernization

theorists of the 1960s and 1970s. It remains critically relevant to the issue of comparative

economic development. Particular reference was made to thezaibatsu of Tokugawa eraJapan and the manner in which government policy compelled many of the former samurai

class into entrepreneurial activity (Smith, 1969, 1988). This provided one set of

arguments for the origins of Japans nineteenth century escape from economic

dependency. Discussion of entrepreneurship has been much less full in work on the

origins of development since the 1970s (Adelman in Stiglitz and Meier, 2000). Leftist

and liberal hostility to exploiting classes has apparently left its mark even on later

development theories and businessmen do not necessarily fit well with the concept of

benign institutions.

Yet indigenous entrepreneurs were vital to development. In India, the

entrepreneurial class had clear indigenous origins, not only in the ancient status

categories ofvaishya, but more recently in the cash-based revenue system of the Mughal

and post Mughal rulers, which was predominantly serviced by Hindu and Jain mercantile

families (Bayly, 1983). Many other social groups, including members of former

intelligentsia families, have contributed to Indias recent economic advance. However,

the continuities between the late-Mughal trading and money-lending class and Indias

present business elite are quite remarkable. Most of the industrial and financial leaders

who established the first Indian planning regime in the last stages of the Second World

War were from this background and their descendents remain critical in todays Indian

11


14/37

take-off. To take only two examples, the Birla group, which remains one of Indias

industrial conglomerates (Malik Kudaisya, 2003) and Lakshmi Narayan Mittal, the

worlds largest steel producer, both come from the Marwari community, which provided

many of the traders and moneylenders of pre-colonial central and north India (Timberg,

1978). Throughout the colonial period, Indias mahajans (bankers) andbanias

(commodity traders) retained control of the bulk of Indias internal trade, even if some of

the most lucrative import-export trades were dominated by European agency houses. This

is one of the clearest examples of the indigenous origins of comparative economic

development. The situation stands in contrast to Africa, where European and

(significantly) Indian or Lebanese traders controlled the bulk of internal trade or even the

Ottoman and Arab lands, where Armenians, Jews and Greeks were very powerful.

Why did large sections of the Indian business communities survive colonial rule,

when others elsewhere in the world were unable to do so? One answer was that from the

fourteenth century onward such families had developed sophisticated double-entry book

keeping and credit note (hundi) systems. Their social organization and marriage patterns

allowed them an all-India reach. They were able to move money and goods across the

vast distances of inland India, up into Russia and Afghanistan and even across the Indian

Ocean to the East African coast (eg. Markovits, 2000). As suggested, the decentralization

of power during the late Mughal period and the dependence of the early British state on

their expertise allowed them to flourish. Again, pre-colonial and early-colonial India

benefited from a relatively well- developed network of urbanized places that could be

used as bases and entrepots by the commercial communities. Even when many larger

cities were in flux in the eighteenth century, I estimate that 10% of the population lived in

placed with populations of 5,000 or more and distinctly urban characteristics (Bayly,

1983).

Discussing redistributive conflicts which might impede development, Pranab

Bardhan noted the efficiency of traditional Indian business, but was skeptical of the

extent to which the colonial-era Indian business class could contribute to the evolution of

more complex (impersonal, open-legal rational) rules or institutions. (Bardhan in Meier

12


15/37

and Stiglitz, 2000, p. 272). He was writing at the end of the 1990s when pessimism about

Indias development prospects was still pervasive. Irma Adelman rightly, in my view,

contested this position (Adelman, in Meier and Stiglitz, 2000, p.293). Merchant capital

could be, and often was converted into industrial capital, as in the case of western Indian

city of Ahmedabad and Kanpur in north India (Gillion, 1968; Bayly, 1983).

The old Indian merchant class, disparaged successively by British rulers, Indian

nationalists and modern economists, also played a significant if unconscious and

interested role in the development of political and social capacities in nineteenth century

India. For instance, it was mercantile families (though in this case from non-vaishya

families) who pioneered education in early nineteenth century Bengal and Bombay. As an

example of the contribution of a flourishing entrepreneurial class to wider empowerment,

merchant people in several parts of India are known to have patronized and supported the

newspaper editors and lawyers who became leaders of the early Indian national Congress

and other public bodies (Bayly, 1975; Washbrook, 1976). In the twentieth century, the

Birlas and other western Indian bankers funded M. K. Gandhi, who was himself of

commercial caste origin, despite his persisting ambivalence to modern industrial society

(Markovits, 1990). In development terms one might draw the inference it is important to

locate and enlist the support of commercial groups.

Agrarian hierarchy and economic capacity

In examining the history of comparative development in the great Eurasian and North

African peasant societies, the role of the peasant farmer as entrepreneur and food

provider is clearly critical. Without a robust peasant-farming sector the fate of colonized

and semi-colonized societies in the early modern and modern periods might have been

even worse than it actually was. Consequently, the possibilities for late-colonial and post-

colonial economic development would have been even more sharply curtailed. William G

Skinner, for instance, pointed in the 1970s to the continuing buoyancy of rural-marketing

systems in communist China (Skinner, 1977). Even if some peasant communities have

suffered relatively during the contemporary expansion of the Chinese economy, it is clear

13


16/37

that indigenous forms of the peasant family farm have sustained growth in favored parts

of the rural economy such as the coastal provinces. Equally, the robust farming traditions

of dry inland areas such as Shanzi have preserved them from even greater decline during

periods of drought and war. In Meiji Japan, by contrast, the flexibility of peasant

inheritance systems appears to have guaranteed a flood of rural labor into the developing

towns while sustaining the heavy, regressive taxation that made possible the first

Japanese miracle of the 1880s and 1890s.

The preservation of existing agrarian capabilities and the creation of new ones in

colonial India evidently helps explain some aspects of the relative development of

different regions of the Indian economy over the last two centuries. Many commentators

noted that the system of peasant proprietorship that prevailed over much of the Punjab

provided a more solid basis for agrarian development than thezamindari system of

Bengal where proprietary powers were invested by the British in a class of rack-renting

landlords as early as 1793 in the so-called Permanent Settlement. AJR allude to the

restrictive nature of occupancy rights in Bengal. Early Indian economic thinkers such as

Romesh Chunder Dutt pressed for a permanent settlement between the tenant and the

zamindar, which they thought would leave an investment premium for the cultivator

(Dutt, 1980). Even within different regions, tenurial systems-or rather farmers

exploitation of tenurial systems-seem to account for differences in prosperity. Thus in

United Provinces and Oudh (todays Uttar Pradesh), the relative dynamism of the west

compared with the east of the province was attributed to the greater prevalence of peasant

ownership in the west (Stokes, 1978). Even in Bengal itself, the eastern deltaic areas that

were not incorporated into the zamindari system, enjoyed much greater and more

equitable growth than the west of the province, at least until the late nineteenth century

(Iqbal, 2004).

Now it is true that colonial policy-the desire to extract revenue for fiscal-military

purposes-determined the nature of tenurial patterns across India to a considerable degree.

Yet colonial policy itself was working within a much wider field of social forces.

Immediate pre-colonial tenurial systems determined to an equal extent as colonial policy

14


17/37

the actual form of proprietorship under British rule. It was the triumph of the pre-colonial

Sikh movement amongst the predominantly Jat peasant farmers of northern India which

gave rise to the particular type of intensive and balanced cultivation that allowed Punjab

to grow in the nineteenth and twentieth centuries while much of Bengal and Bihar

remained economically stagnant. Again, in the case of the Punjab or Gujarat, the broad

status group called Pattidar, formed an equally buoyant peasant society that later

diversified into commerce and the professions in both India and East Africa

(Charlesworth, 1985; Hardiman, 1981). Here again it was Indian actors who made use of

these tenurial advantages. Peasant farmers in the Punjab sent their sons into the British

Indian Army, where they learnt transports skills and brought home development money

and land grants. Religious and social movements such as the Arya Samaj in the Punjab or

the monotheistic Satya Narayani movement in Gujarat enhanced local capabilities

through education, political mobilization and social provision during crises. In the post-

colonial period, the Punjab has been the model for the more prosperous parts of the

agrarian economy in both India and Pakistan. Here again, it is essential to acknowledge

the hybrid nature of comparative economic development and analyze the actual social

processes by which some colonial policies and practices were converted into benign

institutions by Asian and Africans or Latin American people.

Colonial law, benign sociology and peer-education

In the AJR model the expansion of rights of property and freedom from expropriation are

rightly regarded as key aspects of benign development. A historian would need to ask

whose rights and whose freedom? In Asia, as in parts of Africa, colonial legal systems

certainly conferred rights and economic stability on some of the people some of the time.

The division of responsibility between the executive and judicial, at least in the higher

reaches of government, also created breaches in bureaucratic government through which

indigenous legal experts and their colonial sympathizers could penetrate. Yet in a

dependent as opposed to a settler colonial society, law was often an engine of dominance.

Legislators and judges were largely white. In many colonial situations there was no

15


18/37

division of powers so that magistrates and judges were the same people. Justice was

expensive and litigation became a vice rather than a virtue.

Indian liberals needed also to try to purge the workings of colonial law, to train

Indian munsiffs or under judges and to disseminate good information about the legal

process to middle-class townsmen and peasants who might be tempted into its orbit. The

premium here was on local information. The legal system itself was a purely neutral

machine. It might corrupt or it might lead to improvement -development in

contemporary speech. Indians, however, were already attuned to the notion of rights and

late Mughal lawgivers emphasized the rights of the peasant against those of the local

magnates, who were often conceived as impediments to royal justice. The notion of

representation to an equal or superior (vakalat) could equally be adapted to the British

legal system. The critical point of change was the development of a class of peer

educators (Rao and Walton, 2005, p.9). This is an example from the memoir of a liberal

reformer who grew up in the 1840s. Babu Sambhu Nath Pandit, then a mere legal clerk,

but later government pleader, settled sometime in the 1840s in Bhowanipore a village

outside Calcutta where he rented a small, dingy room. He decided to set up a legal club to

help the students of the locality. The account goes on [b]rilliant were the legal

discussions that were nightly held in that little room. A stranger entering it could have

believed that he had alighted on a sort of Bengalee Temple Bar [the London law courts].

Students stood as prosecutors and defendants. They dissected government regulations to

find the principles behind them (Ghose, 1912, p. 102).

Not all the boys trained in this way went on to study for the Bar. Two at least

retained the petty government office which they had secured because this allowed them

more free time for their journalistic writing. Indeed the whole of educated society in

Bengal and beyond was saturated with legal notions of judicial contestation and property

rights. Much of this expertise was deployed simply to make a living. Most reformers,

public men, and later nationalist politicians were, however, lawyers, so that some of the

expertise was employed to critique the colonial government and fight cases on behalf of

poor farmers oppressed by landlords or moneylenders. Litigation spread rapidly in India

16


19/37

after the 1840s, drawing in small shopkeepers and more substantial peasants. Some

aspects of this, such as extreme litigiousness, were malignant. Yet awareness of rights

became a feature of all levels of Indian society and contributed to the rapid development

of Indias wider critical public sphere discussed below.

Along with awareness of rights Indians in the mid-nineteenth century began to

develop what I term a benign sociology, that is an understanding of their own society in

a wide geographical sweep which adapted colonial ethnographic and statistical models to

empower rather the subjugation its people. The colonial state may have attempted to

categorize and count its Indian subjects, but it was soon faced with Indian intelligentsia

who collated statistics on the colonial states failings, argued against the view that Indian

society was immobilized by caste and religion and created for it a glorious civilizational

past which would presage a free and enlightened future. A variety of Indian travelers and

auto-ethnographers helped achieve this aim even before the 1870s, notably Dadhabhai

Naoroji, R. C. Dutt, Keshub Chunder Sen and Bholanauth Chunder (Chunder, 1869).

They stressed Indias traditions of charity, its veneration for family and marriage and its

aesthetic and moral sensibility, all of which were compared favorably with the West.

Similar movements to reclaim a sense of self-respect through reversing colonial

stereotypes were seen in other colonized countries. In Egypt this was achieved by Salama

Musa (Musa, 1961). In Africa, Jomo Kenyattas Facing Mount Kenya (Kenyatta, 1938)

created a benign view of Kikuyu society. This amounted to a kind of developmental

morale-raising and its importance in stimulating Indian nationalism, internationalism and

aspirations to improve material life cannot be understated. For development to occur

people need to have the belief that they can succeed and that their own societies are

essentially benign. Many colonial and some post-colonial agencies supposedly devoted to

improvement have helped to erode rather than raise morale by marginalizing indigenous

public sphere institutions. The activities of international aid agencies after the recent

Asian Tsunami are only the most recent example of this.

The Indian ecumene: an indigenous public sphere

17


20/37

Even when, during the period 1960-90, most economists and politicians dwelt on Indias

poverty rather than its entrepreneurial and legal-rational capacities, almost all lauded the

extraordinary resilience of Indias democratic traditions and culture of public debate.

Arguably, this openness has been a critical determinant of the success of contemporary

Indias knowledge economy that gives the country an edge even over China, since

poorer areas in Southeast Asia and eventually Africa will in turn challenge Chinas

industrial predominance. The culture of openness and public debate also has significant

advantages for the development of capital markets and services, since potential investors

and clients have much easier access to information in India than in much of the rest of the

developing world.

Amartya Sen has elegantly demonstrated that the argumentative Indian has deep

historical roots that possibly stretch back to ancient debates between Buddhists and

Brahmins and the liberal policies of the seventeenth century Emperor Akbar (Sen,

2005). This argument runs the risk of being too general. What is very clear, however, is

that Indian society emerged from the later Mughal period with a well developed culture

of debate and contestation which centered on the houses of Indo-Muslim law officers, the

dwellings of learned pandits, debates in market places and an arsenal of forms of protest

and representation to the authorities. I have called this the Indian ecumene (Bayly 1995)

and have suggested that it formed a variant of the critical public sphere theorized for

Europe by Jurgen Habermas (Habermas, 1992). These forms of debate and contestation

of the policies of rulers could and did provide some benefits to the wider political

economy in that they were deployed against excessive taxation or the sequestration of

property and goods by the Mughal-successor governments or by agents of the East India

Company. These arenas of debate were sometimes paralleled at the local level by the old

popular institutions of adjudication, thepanchayatorsabha. These were single or multi-

caste bodies that aided power-holders to decide property or criminal cases. There is

evidence that this pre-colonial system continued to operate across large parts of India in

the nineteenth century. But whether panchayats actually persisted or not, the fact that they

once did so provided a powerful myth for the emerging Indian intelligentsia (Bayly,

2007).

18


21/37

I estimate literacy in the broadest sense at about 9% of the male population in the

early nineteenth century. This is comparable with areas such as Poland or southern Italy

at that time, but lower than in contemporary East and Southeast Asia where Buddhism

helped impart basic education (Bayly, 1999, pp. 36-44. Even if literacy rates were

relatively low by western European standards, India was a highly literacy aware society.

This contributed to its potential for growth and modernization. From the late pre-colonial

period, large armies of bazaar writers copied letters for literate and semi-literate people.

Writers copies letters and early newspapers and read them out to people in bazaars or the

more urbanized villages. Wandering teachers and purveyors of news brought information

to ordinary people with extreme rapidity, as the British rulers noticed to their

consternation. Small towns and villages were also the scene of debate and discussion. The

newsletters and indigenous newspapers that circulated in these arenas often drew on the

tradition of the Indo-Persian akhbarat, the newsletter that informed rulers and others of

infractions of good government. Indian villages were neither isolated nor passive.

Instead, in addition to caste and village assemblies, there were, as a newspaper said, the

gatherings under the shady banyan tree where village politics was discussed, and the

womens meetings by the river bank where reputations were made and unmade. (Indian

People, 10 Jan.1909). This sort of cultural practice helps to explain the vigor of Indian

democracy in recent times and also the speed with which information about

improvements and new sources of income have reached the masses of the population.

Even if state policies to bring education, clear water and medicine to villages were largely

non-existent before Independence, and flawed after it came, the capacity to aspire for

change was present in very strong measure and has been rapidly exploited in recent years.

Information and association in the colonial period

Writing of the contemporary poor in Bombay, Appadurai (in Rao and Walton 2004)

argues that the capacity to aspire, to build consensus from the inside and set precedents

for projects of human flourishing are essential components of social and economic

development. These endogenous factors are as important if not more important than

19


22/37

exogenous ones, such as government aid, cooperative credit and proper price regimes,

etc. This argument also finds support in nineteenth century India, when it was indigenous

elites who built the beginnings of democracy inside the citadel of colonial bureaucratic

power. The critical element here was a semi-free press and press freedom remains an

important component of development in the wider sense. The press not only created

knowledge communities but, by raising awareness and concern for national welfare

became a generator of symbolic public goods (Rao, 2006). Of all Britains non-settler

dependencies, it was first in India that a flourishing modern press developed. The first

Indian daily paper was the Calcutta Journal established in 1819 by British radicals and

Indians who attacked the corruption and monopoly of the East India Company, lending

an air of critique, sarcasm and controversy to the Indian press that it has never lost.

The development of the Indian press owed much to the growth of British

democracy, pointing indeed to the colonial origins of comparative development in

AJRs terms. At the same time, the key factor was the transformation by Indians

themselves of the notion of a critical public. Self-empowerment by peer-educators was

again important. For instance, the first generation of English-knowing boys in the

Calcutta Hindoo College began their own in-house journal in the 1840s. They created a

system of manuscript newspapersthese contained essays and dissertations on literary

subjects and other important issues of the day which were circulated among friends and

relations (Ghose, 1911, p. 34). Later, when they worked on government offices, they

were allowed to read and copy incoming telegrams. They assembled this information in

Bengali and English newspapers which were often harshly critical of the government

from which they derived the information.

As important as journals and books was the culture of association and debate.

This had colonial origins in the societies established by officials and missionaries in

Indian schools and colleges to carry through the colonialists project of westernizing the

Indian elites. Yet here again, Indians appropriated these societies to argue back against

the British rulers, using their own battery of indigenous rhetorical and, soon critical

statistical methods. A Calcutta Sociological Society was established as early as 1862, not

20


23/37

long after the science had emerged in Britain and France. Indian associations pioneered

statistical survey methods to expose peasant poverty.

Religion, nationalism and social aspiration

By the later nineteenth-century as Carey Watt (Watt, 2005) has shown, India possessed

an extraordinarily sophisticated range of civil society bodies, dedicated to the generation

and diffusion of information, public education, national independence and social reform.

One feature of these associations that should be mentioned here is the importance of

religious organization in the generation of social capabilities. This has been noted in

modern development literature. For much of the nineteenth and twentieth centuries the

major development work done in India outside the reluctant and under-fundedoperations of the colonial state was carried out by bodies representing new religions of

mankind, Hindu, Christian, Muslim, Parsi and others. Neo-Hinduism was essentially

this-worldly in Weberian terms, though ironically Webers misunderstanding of India

and later economic historians misunderstanding of Weber have occluded this point.

These religious movements included the Arya Samaj (Aryan society) that worked on

behalf of peasant communities (Datta, 1999) and established itself among the Indian

plantation workers in Mauritius and the West Indies, attempting to educate them and

improve their working conditions. Even earlier the Brahmo Samaj (Divine Society)

seeking to rid Hinduism of what it saw as polytheism established schools for the poor and

initiated campaigns to improve the lot of secluded Indian women and widows. At a rough

calculation, various religious societies employed up to a 100,000 full-time or part-time

employees by the end of the nineteenth century. Even moderate nationalist movements

such as the Servants of India Society drew on traditions of this worldly religion, in that

they drew on earlier ideas of sacred service (seva) and transformed them into a practice of

public service. These volunteers, with their larger number of aids and helpers, were active

in educational and charitable activities across the country.

Contesting colonial government

21


24/37

The consensus that has emerged from recent applications of historical data to the

experience of development has stressed the importance of building capabilities and

strengthening aspiration. This article has used the experience of the intelligentsia of

British India to further illustrate this point. AJR, however, use British and comparative

history to make a further point. The growth of equality and empowering institutions has

often arisen from a situation where elites, fearing social disorder, made concessions to the

mass of the people. This was the case with the domestic British constitutional reform

after 1867. A balance between active, centralized government and the ability of popular

interests to mould government policy has proved positive for economic development.

Other examples of change of this sort can be found in Meiji Japan, where the new elites

gave displaced members of the samurai class and merchant groups an incentive to make

the new state and economy work by the distribution of bonds.

In a colonial situation such as British India, government proved very unwilling to

surrender power vested in the predominantly European bureaucracy. But, under financial

and political pressure, it did give up some of its powers in a series of constitutional

changes that began with the 1883 municipalities act and broadened out in 1892, 1909,

1919 and 1935. By 1935 a small franchise existed and Indian political parties constituted

government in the provinces, albeit still dependent on the British Indian Civil Service.

Historians disagree about the ultimate importance of these moves towards the

decentralization of power. It seems clear, however, that Indias democratic institutions

did, to some extent, develop within and in response to these local electorates. If only in

order to challenge colonial rule, Indian liberals and nationalists extended their

organization into small towns and rural localities. They enlisted more substantial farmers

and rural entrepreneurs to their cause. It was, however, indigenous forms of social

connection generated by caste, religious community, bonds of patronage, and ultimately

nationalist aspirations themselves, that made it possible for Indian public men to create

their own style of democratic institution.

This paper has been arguing that historical evidence would help us to refine and

develop AJRs term colonial origins of comparative development and that pre-colonial

22


25/37

and indigenous societal capabilities in Sens sense need to be brought into the equation.

A critical issue is how these capabilities and aspirations were enhanced during the

colonial period, both by peer education and contests with the power of the colonial

bureaucracy.

A case study: the Prayag Sugar Company, 1910

One final example of capacity formation in colonial India brings all these elements

together- the entrepreneurial, the legal and indigenous religion. This was the case of the

Prayag Sugar Company established in Allahabad, United Provinces, India, in 1910

(Leader, 23 Jan. 1910) Under the influence of the increasingly radical swadeshi (home

industry) movement, Indian constitutionalist leaders fronted by Motilal Nehru, father ofJawaharlal Nehru, and Madan Mohan Malaviya, a key Congress politician and orthodox

Hindu, founded the Prayag Sugar Company, whose title evoked the holy Hindu bathing

place near the city. They enlisted one of the most important and wealthy of the traditional

Indian merchants of the city (Lala Ram Charan Das) who bought many of the shares.

This family had already begun to prosper in the decentralized conditions of immediate

pre-colonial rule. The Company procured machinery for sugar pressing from England,

but the aim was to assemble the more basic apparatus locally. Motilal used his legal

contacts with the local sugar growers in the surrounding rural districts to guarantee sugar

supplies. Here, then, indigenous people used the forms of colonial legal structures and

corporate enterprise, but brought them together with the aspirations, connections and

sensibilities drawn from Indian society to try to effect change and to spread its benefits to

ordinary people.

We do not know the fate of the Prayag Sugar Company, so an expert on

development might well ask: But what did all this activity and debate really add up to,

given the inflexibility of the colonial bureaucracy and the poverty and famines which

wracked colonial India? The answer can be given both in the medium and the long term.

In the medium term, the culture of debate and the moral insurgency of the Indian elite and

its British interlocutors did, in fact, improve the social, economic and political conditions

23


26/37

of the Indian populace. The Bengal government acceded to the campaign against indigo

planters in 1871 and accorded limited rights to tenants in the 1880s. Constant agitation

and campaigns in the Indian and British press was one factor that caused British Liberal

and Labour governments to concede a very limited degree of local self-government to

India after 1883. This nourished the emerging Indian democratic culture and went a little

way towards improving primary education and the distribution of relief in the countryside

during bad seasons. Constant harassment by the press and emerging Indian public opinion

made some inroads into what would otherwise have been the impermeable autocracy of

the India Office. In the longer run, it is difficult to imagine the emergence of

contemporary Indias vibrant public culture and information economy without some of

these initial steps. The issue was not so much the colonial origins of Indian development

as of colonized Indians development of social capacity and their maintenance, in adverse

conditions, of an entrepreneurial and critical spirit.

African comparisons and contrasts

Historians of sub-Saharan Africa make four key claims about the continents pre-colonial

inheritance and its early-modern encounter with the West (Vaughan, 2006). This suggests

once again that it is the conflict and accommodation between indigenous and colonial

institutions, rather than colonial institutionsper se, which have determined Africas

development in the longer term, for better or for worse.

First, the slave trade and the implications of the expansion of slavery for internal

African society stunted its growth, even if it did not actively under-develop Africa. This

is perfectly compatible with AJRs data. Indeed, it is built into the idea of an extractive

colonial inheritance. But it is important to note that, from the later-nineteenth century,

much of West Africa, the key sector of the Atlantic slave trade, was relatively better

placed in terms of commercial linkages, GDP per head and institutional stability than east

Africa or even Southeast Asia. It remained so throughout much of the twentieth century.

This may of course have fostered a type of economy in which powerful magnate gate-

keepers battened on external connections rather than exploit and develop internal

24


27/37

resources, as Frederick Cooper argues (Cooper, 2005). But it did at least stimulate new

forms of entrepreneurship.

Secondly, much of Africa lacked or, rather, Africans felt no need to build

powerful, well defined states to the extent that Europeans, Asians or North African

Muslim societies did. There were some kingdoms with highly developed state-like

features, such as Asante or Benin in the West or Buganda in the East. There were also

large multi-ethnic empires. But these were usually built over, and did not generally

replace tribal segments either in the centre or at the periphery and do not seem generally

to have established powerful ideologies which would have legitimated centralized

control. Most importantly, complex, cash-based revenue systems had not developed to

the same extent as they had in Eurasia and the Muslim North. Indians and subjects of the

Ottoman Empire had long been used to rendering unto Caesar what belonged to Caesar

and this provided a more substantial base for colonial and postcolonial statehood. States

in Sub-Sahara Africa tended to decompose from within relatively rapidly.

Thirdly, this combined with the often-difficult environmental conditions for

agriculture, led to extensive rather than intensive forms of cultivation. As observed

above, African farmers had, and retain today, what has been called an exit

option.(Cooper, 2004; Austin, 2005) This made elite control of labor and its allocation to

wealth creation more difficult. This should not be interpreted as evidence that Africa

failed to take some necessary evolutionary trajectory. Indeed, it probably made African

societies more equitable and less exploitative than their Eurasian contemporaries until the

later nineteenth century. Africans prized honorable leadership; they maintained complex

social patterns based on age-sets, but in many areas they avoided constructing a well-

developed, stable and exclusionary class structure. Partly as a result of this, the city as a

social formation was not a marked feature of much of East and Central Africa, outside the

Arab-influenced Swahili Coast. Again, unlike the great kingdoms of South, East and

West Asia, sub-Saharan Africa did not generally have an ancient system of land-revenue

payments based on the exploitation of peasant labor. This limited the emergence of

indigenous commercial classes and partly explains Asias differential advantage in

25


28/37

twentieth century development. There were, of course some important exceptions to this

rule. In Yorubaland, for instance, a system of tribute payment to warlords from farmers

had developed during the Yoruba wars. Political relationships were increasingly

negotiated through cash. During the nineteenth century, the West African cocoa economy

developed within, and in turn stimulated this cash economy (Berry, 1993). This reminds

us that there was much variation within both West and East African economies and that

trans-continental comparisons should not be driven too far. Yet, by and large, cash

revenue systems were more deeply rooted in North Africa and in South Asia than in any

part of Sub-Saharan Africa.

Finally, literacy was a latecomer in much of Africa, even during the colonial

period. Asia and the Middle East had literate bureaucracies and commercial communities

along with a high degree of popular literacy awareness. This also facilitated the

emergence of strong states. Paradoxically, then, it was the fact that a pre-colonial

extractive state did not exist over much of Africa that made its colonial experience even

more traumatic than that of Asia as Young (1997) and Herbst (2000), among others have

demonstrated. The leaders of postcolonial states in turn attempted to create integral,

patrimonial states following colonial models and these continued to clash with many

local structures and sensibilities (Young, 1997, p.290).

How does this relative weakness or absence of states, classes, literacy and cities in

pre-colonial and early colonial Africa fit with the idea of the hybrid origins of

comparative economic development?

Europeans created the most extractive forms of all colonial relationships

relationship with West Africans in the form of the slave system. High settler mortality- or

at least the perception of it- inhibited European settlement, in conformity with AJR.

However, once the slave trade had been suppressed, or has moved southward to

Portuguese territories after 1840, what was to become Ghana and Nigeria and other

colonial territories in the North West were in a strong position to develop rapidly on the

basis of what were called legitimate trades, palm oil, cocoa, timber etc (Hopkins, 1976).

26


29/37

Wealth created on the coast had a backward linkage effect, producing wealthy tribal elites

and local kingdoms and enriching migrant cocoa farmers and bazaar traders (Hill, 1956).

In terms of the AJR formulation, colonialism in West Africa after the 1830s had

two contradictory faces and this challenges their model. First, it created external

economic linkages through trade, the activities of Christian missions and educational

facilities, an entrepreneurial creole elite and large coastal cities. All these provided the

context for the growth of African capacities. The Gold Coast and Ghana had some of the

earliest African newspapers and in the Gold Coast African National Union, one of its

earliest anti-colonial political parties. Arguably, West African institutions have been

more stable than those in East and Central Africa, despite periodic wars, relapses into

authoritarian rule and misuse of oil revenues. The fact that West Africa has supported a

huge population boom is good evidence of relatively successful comparative economic

development. Yet, it is important to note that it was precisely the lack of a large white

settler class precisely because of its reputation as a white mans grave- that indigenous

entrepreneurship was able to flourish and a critical public emerge. For instance, Andrew

Cohen in the British Colonial Office in the 1950s was able to argue that West Africa was

two generations or more ahead of East Africa. In addition, the paradoxical benefits of

having colonial institutions without a colonial settler class was enhanced by the

inheritance of indigenous institutions already mentioned: cities and bazaars, some state-

like formations, religious and cultural forms which appropriated and used incoming

Christian education and mores.

The contrast here with East and Central Africa is clear. Colonialism came to the

East quite late (after the 1870s) not so much because European fears of mortality as

because of geographical remoteness. After 1870 a colonial and Indian settler class

monopolized economic and political power, especially in what became Kenya, Tanzania

and Rhodesia. Historians argue that this frustrated the development of African capacity

for much of the colonial period (Low and Smith, 1976; Lonsdale and Berman, 1992).

Consequently, East and Central Africans had much more difficulty using the mechanisms

of the post-colonial state and economic institutions because of lack of experience and

27


30/37

colonial policies of divide-and-rule applied to different tribal groups. This has lead to

misgovernment, genocide, economic stagnation and even in the case of Malawi and the

Horn of Africa, the recent resurgence of famine.

In this case again western style institutions, property rights forms of consensual

government were known and potentially available to East and Central Africans. But their

capacity for enhancing living standards has even now hardly been realized, mainly

because the actual form of colonial rule-a dominant white farming sector with Indian

subordinates, proved impermeable to most Africans. Additionally, pre-existing forms of

social organization in many of these territories-the relative absence of market-based

entrepreneurship of market organization-made it more difficult yet for these colonial

institutions to bond with African ones and create flourishing hybrids. As Derek Peterson

has shown, literate instruments, newspapers spread fast in Kenya. But they did so very

late, in the 1940s and 1950s (Peterson, 2004). By comparison the Gold Coast and other

West African settlements had newspapers as early as the 1870s, while India, as observed

earlier, had its first daily newspaper in 1819 and its first Bengali language newspaper

shortly afterwards. Similarly, town councils and juries with indigenous members also

existed much earlier in Asia and West Africa than in East Africa. The reason for this

concerned both colonial economic or political interests and also the inheritance of

indigenous literacy and literacy awareness. By contrast, the medium-term historical

analysis suggests that the relatively denser white settlement in East Africa impeded rather

than advanced comparative economic development.

Conclusion

This paper has argued that Acemoglu, Johnson and Robinson have created a powerful

tool of long-term historical analysis that has the great advantage of being empirically

testable. My concern has been to suggest ways in which to make their model compatible

with, or bring it into dialogue with, a very different type of methodology employed by

social and political historians or historical anthropologists. Historians build up larger

structures of argument from carefully contextualized special cases, or local and regional

28


31/37

studies. I think these can be used as useful checks on the broader arguments advanced by

long-term analysts, such as AJR, North and Landes, or for that matter, Gunder Frank.

In addition, social historians draw attention to less easily measurable factors in

development which were endogenous to different world societies: for instance, rates of

literacy in pre-colonial or colonial times, the circulation of information through news

sheets or later newspapers, the existence of local deliberative bodies, or the participation

of indigenous people in such bodies under colonialism, the degree of protection

historically afforded to tenants, and so on. Adopting what I have called a hybrid approach

to the history of economic development to show how colonial institutions have been

functional to the growth of incomes and well-being at different times and not at others,

should help analysts to fine tune the broader models. First, it would help to further refine

critiques of the use of current GDP per head as a benchmark for long-term development.

We also need to be more alert to medium-term historical change. Something would be

lost by not noting that in 1950, West Africa and Burma, for instance were as wealthy and

economically sound as Singapore, Thailand and Malaysia.

Secondly, it would help to refine the notion of colonial institutions, breaking

down this broad category into several different elements at different times and places.

The British dominions, for instance, cannot really be placed in the same category as India

or Nigeria. Thirdly, detailed historical contextualization would allow us to bring into the

argument pre-colonial, non-colonial or indigenous institutions. This would give us a

better idea of how clearly benign institutions equality before the law, one man one vote,

the right to criticize government traveled and were transformed in different colonial

environments, many of which were hostile. Fourthly, turning to the arguments of Sen,

Appadurai and others, the wider use of historical data in development debates would give

historical depth to the notion of capacities and capabilities. The history of newspaper in

India, which was considered here, has been entirely positive in its political, social and

economic impact. It took root partly because a culture of criticism was allowed to

develop by authorities in the UK, even when it was irritating to the Indian government- a

29


32/37

colonial origin. But it also flourished because it bonded with existing styles of

information gathering and criticism- an indigenous capacity that was thereby enhanced.

What is the use of all of this to policy makers? Firstly, historians can introduce a

much-needed uncertainty into the minds of policy-makers. The possibility of chaos-in

the technical sense- emerging from policy initiatives is very great. Unintended

consequences follow from improperly analyzed assumptions. The British in Iraq, 1914-

20, swept away the Ottoman government, its municipal councils and its revenue system

on the grounds that they were despotic. The result was a series of ethnic insurgencies

that continued throughout the 1920s and consumed 40% of the colonial Offices budget

that might have been spent on African development. The consequences of Sir Arnold

Wilsons administration might have served as a warning to our recent politicians. General

ideological principles need to be applied with care and western democratic institutions

are not the only benign institutions known to mankind.

Secondly, historical examples counsel administrative patience. India, once seen as

passing through its most dangerous decades or hobbled by a Hindu rate of growth, is

now it is seen as a thriving knowledge economy. Africa, three years ago was designated

the hopeless continent. But enhancing capacities, instilling the sense of aspiration takes

time. It involves a long domestication process in which existing sensibilities can be

adjusted to best practice from abroad. Peer educators are critical and so is transparent

politics. Religious organizations, though a double-edged sword, cannot be ignored

because they may affront western rationalism. This paper has taken a decidedly non-

linear approach to the growth of material and moral welfare in the long term and here it

contrasts with AJRs broader reading. These two approaches are not necessarily

incompatible; nor does one represent historical truth and the other not. From the point

of view of policymaking, however, the more diffuse and specific methodology of the

social historians approach may help to nuance policy initiatives by emphasizing the

complexity of historical causation. In the case centrally discussed above, the institutions

most likely to generate welfare will not necessarily bear much resemblance to the

30


33/37

common forms of western democracy and governance. They may for instance, be

indigenous councils, conclaves of elders, religious institutions or cultural performances.

Thirdly, entrepreneurial classes may become corrupt when they operate as

monopolists, but indigenous entrepreneurial traditions, whether on the model of the

Indian bania community or the Chinese family firm, have proved critical in rapid

economic development. These businessmen have a sense of the local market and can

assess local patterns of consumption. Finally, the stability and proper working of local

deliberative and civil society institutions are as important as democracy at a national

level. Centralization is often misguided. But any such democratic institutions must be

legitimated by indigenous ideologies and practices if they are to be fully accepted.

References

Acemoglu, Daron, Simon A Johnson and James A Robinson, The colonial origins of

comparative development: an empirical investigation,American Economic Review,

December, 91 (2001a), 1369-14012.

Acemoglu, Daron, Simon A Johnson and James A Robinson. Reversal of fortune.Geography and institutions in the making of world income distribution, NBER

Working Paper no 8460. 2001b.

Acemoglu, Daron and James A Robinson,Economic origins of dictatorship and

democracy (Cambridge, Cambridge University Press, 2006).

Appadurai, Arjun, The capacity to aspire: culture and the terms of recognition, in Raoand Walton (eds.) 2004, pp. 59-84.

Austin, Gareth, Resources and strategies south of the Saharah. Long term dynamics ofAfrican Economic development, papers presented to African Studies Association,

Washington DC, Nov. 2005.

Bayly, C. A.,Rulers, townsmen and bazaars. North Indian society in the age of British

expansion 1780-1870 (Cambridge, Cambridge University Press, 1983)

Bayly, C. A. ,Empire and information. Intelligence gathering and social communication

in India 1780-1970 (New Delhi, 1st

Indian edn., Cambridge University Press,1999)

31


34/37

Bayly, C. A., The birth of the modern world 1780-1914. Global connections andcomparisons (Malden, Blackwell, 2004)

Bayly, C. A., Ramohan Roy and the advent of constitutional liberalism in India,

Modern Intellectual History, 3, 1, 2007.

Berry, Sarah,No condition is permanent. The social dynamics of agrarian change in sub-

Saharan Africa (Madison. Wis., University of Wisconsin Press, 1993)

Chandavarkar, R.S., The origins of industrial capitalism in India. Business strategies and

the working class of Bombay 1900-1940 (Cambridge, Cambridge University Press,

1994)

Charlesworth, N, Peasants and imperial rule. Agriculture and agrarian society in the

Bombay Presidency 1850-1935 (Cambridge, Cambridge University Press, 1985)

Chunder, Bholanauth, Travels of a Hindoo to various parts of Bengal and upper India (2vols. London, 1869)

Cooper Frederick,Africa since 1940 (Cambridge, Cambridge University Press, 2004)

Datta, Nonica, Forming an identity. A social history of the Jats (New Delhi, OxfoedUniversity Press, 1999)

De Vries, Jan, The industrial revolution and the industrious revolution, Journal ofEconomic History, 54, 1994, 240-70.

Dutt, R C, The peasantry of Bengal (Calcutta, 1874; reprinted with an introduction by

Narahari Kaviraj, 1980).

Engerman, Stanley L and Kenneth Sokoloff, Institutions, factor endowments and pathsof development in the New World,Journal of Economic Perspectives, XIV, 2000,

217-32

Goswami, Manu, Producing India. From colonial economy to national space (London,

University of Chicago Press, 2004)

Greif, Avner,Institutions and the path to the modern economy. Lessons from medieval

trade (Cambridge, Cambridge University Press, 2006)

Ghose, Manmathanath, Life of Grish Chunder Ghose (Calcutta, 1911).

Ghose, Manmathanath, Selections from the writings of Grish Chunder Ghose, Founder

and first editor of the Bengalee (Calcutta, 1912).

32


35/37

Gillion, Kenneth L,Ahmedabad. A study in Indian urban history (Berkeley, California

University Press, 1968)

Guha, Ranajit,Dominance without hegemony. History and power in colonial India

(London, Harvard University Press, 1997)

Gupta, J.N.,Life and work of Romesh Chunder Dutt(London, 1911)

Habermas, Jrgen, The structural transformation of the public sphere. Translated by T.Burger (Cambridge, Mass. 1992)

Hall-Mathews, David, Peasants, famine and the state in colonial India (London, PalgraveMacmillan, 2005).

Hardiman, David, Peasant nationalists of Gujarat. Kheda District 1917-34 (Delhi, Oxford

University Press, 1981).

Herbst, Jeffrey, States and power in Africa: comparative lessons in authority and control

(Princeton, NJ, Princeton University Press, 2000).

Hill, Polly, Gold Coast cocoa farmer. A preliminary study (London, Oxford University

Press, 1956)

Hopkins, Anthony G.,An Economic history of West Africa (London, Longman, 1973).

Hopkins, Anthony G. (ed.) Globalization in world history (New York, W. W. Norton,

2002).

Hyden, Goran,Beyond Ujamaa in Tanzania. Underdevelopment and an uncaptured

peasantry (London, Henemann, 1980).

Indian People (Allahabad), 1909.

Iqbal, K. Iftekhar, Ecology, society and state in the Bengal Delta, c. 1840-1943,Cambridge University PhD thesis, 2004.

Jansen, Marius B. (ed.), Cambridge History of Japan. The nineteenth century(Cambridge, Cambridge University Press, 1989)

Jansen, Marius B. The making of modern Japan (London, Harvard University Press,2000)

Kenyatta, Jomo, Facing Mount Kenya. The traditional life of the Gikuyu with anintroduction by B. Malinowski (1938, repr. London, Heinemann, 1979)

33


36/37

Kumar, Dharma (ed.), The Cambridge economic history of India, vol. 2 (Cambridge,

Cambridge University Press, 1980

Landes, David S., The wealth and poverty of nations. Why some nations are rich and

others so poor(New York, W.W. Norton, 1998)

Leader (Allahabad), 1910.

Lonsdale, John and Brice Berman, Unhappy valley. Conflict in Kenya and Africa (2 vols.,London, James Currey, 1992)

Low, D.A. and A. Smith (eds)History of East Africa, vol 3 (Oxford, Oxford UniversityPress, 1976)

Malik Kudaisya, Medha, The life and times of G. D Birla (Delhi, Oxford University

Press, 2003).

Markovits, Claude,Indian business and nationalist politics, 1931-39 (Cambridge,

Cambridge University Press, 1994)

Markovits, Claude, The global world of the Indian merchants1750-1947. Traders of Sindfrom Bukhara to Panama (Cambridge, Cambridge University Press, 2000)

Gerald M Meier and Joseph E Stiglitz , Frontiers of Development economics (Oxfrod

University Press, New York, World Bank, 2000)

Musa, Salama, The education of Salama Musa. Translated from the Arabic by L.O.Schuman (Leiden, Brill, 1961)

Naoroji, Dadabhai, Poverty and un-British rule in India (1901, Delhi, 1962)

North, Douglass C,Institutions, institutional change and economic performance (New

York, Cambridge University Press, 1990)

Pomeranz, Kenneth, The great divergence. Europe, China and the making of the modern

world(Princeton, NJ, Princeton University Press, 2000).

Peterson, Derek, Creative writing: Translation, bookkeeping and the work of the

imagination in colonial Kenya (Portsmouth, NH, Heinemann, 2004).

Rao, Vijayendra and Michael Walton (eds.), Culture and public action (Stanford CA,

Stanford University Press, 2004)

Rao, Vijayendra, Symbolic public goods and the coordination of collective action: acomparison of local development in India and Indonesia in Pranab Bardhan and Isha

34


37/37

Ray (eds.), Contested commons. Conversations between economists andanthropologists (Blackwell-Wiley Publishers (forthcoming) 2008)

Sen, Amartya,Resources, values and development(Cambridge, MA., Harvard University

Press, 1997)

Sen, Amartya, The argumentative Indian (London, Penguin, 2005).

Skinner, G., William (ed.), The city in late imperial China (Stanford, University ofCalifornia Press, 1977).

Smith, T.C.,Agrarian origins of modern Japan (Berkel

indigenous and colonolial origins of comparative eco devlt- bayly

Documents